Nigeria’s Macro Outlook Marked by Significant Uncertainty –IMF
Nigeria’s macroeconomic outlook is marked by significant uncertainties, though the international Monetary Fund (IMF) expressed a view that the recent reform would help the country navigate external environment.
Unfortunately, the reform has ushered increased poverty from rising costs and weakening standards of living while misery index has worsened sharply. The internal economy is bleeding profusely, but IMF if of the view that Nigerian authorities have taken important steps to stabilize the economy, enhance resilience, and support growth.
“These reforms have put Nigeria in a better position to navigate the external environment, maintaining that that n macroeconomic outlook is marked by significant uncertainty”, an IMF team, led by Axel Schimmelpfennig, IMF mission chief for Nigeria said after holding discussions for the 2025 Article IV Consultations with the authority.
IMF hinted that elevated global risk sentiment and lower oil prices impact the Nigerian economy, adding that macroeconomic policies need to further strengthen buffers and resilience, reduce inflation, and support private sector-led growth.
At the end of the visit, Mr. Axel Schimmelpfennig, said in a statement that the Nigerian authorities have taken important steps to stabilize the economy, enhance resilience, and support growth.
“The financing of the fiscal deficit by the central bank has ceased, costly fuel subsidies were removed, and the functioning of the foreign exchange market has improved. Gains have yet to benefit all Nigerians as poverty and food insecurity remain high.
”The outlook is marked by significant uncertainty. Elevated global risk sentiment and lower oil prices impact the Nigerian economy. The reforms since 2023 have put the Nigerian economy in a better position to navigate this external environment.
“Looking ahead, macroeconomic policies need to further strengthen buffers and resilience, while creating enabling conditions for private sector-led growth. The authorities communicated to the mission that they will implement the 2025 budget in a manner that is responsive to the decline in international oil prices. A neutral fiscal stance would support monetary policy to bring down inflation.
“To safeguard key spending priorities, it is imperative that fiscal savings from the fuel subsidy removal are channeled to the budget. In particular, adjustments should protect critical, growth-enhancing investment, while accelerating and broadening the delivery of cash transfers under the World Bank-supported program to provide relief to those experiencing food insecurity.
“A tight monetary policy stance is required to firmly guide inflation down. The Monetary Policy Committee’s data-dependent approach has served Nigeria well and will help navigate elevated macroeconomic uncertainty.
“Announcing a disinflation path to serve as an intermediate target can help anchor inflation expectations.” #Nigeria’s Macro Outlook Marked by Significant Uncertainty –IMF Pension Fund Assets Grows to N23.366 Trillion
